Mix Mukhwas and Roasted Til Ajwain classified as sesamum seeds under HSN 12074090, GST at 5%

The AAR, Gujarat ruled on classification of Mix Mukhwas and Roasted Til Ajwain products. Both products, containing sesamum seeds (60% and 97% respectively), were classified under HSN code 12074090 despite processing involving cleaning, salting, roasting, and adding turmeric powder. The Authority applied GRI Rule 3(b), determining sesamum seeds provide essential character to the products. The products fall under entry 70 of Schedule I of Notification No. 1/2017-Central Tax (Rate), attracting GST at 2.5% CGST and 2.5% SGST rates.

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Issues Involved:
1. Classification of products 'Mix Mukhwas' and 'Roasted Til & Ajwain' under HSN code 12074090.
2. Applicability of GST rate for the products under entry no. 70 of Schedule I of Notification No. 1/2017-Central Tax (Rate).

Summary:

Issue 1: Classification under HSN Code 12074090

The applicant, M/s. Bhagat Dhanadal Corporation, manufactures 'Mix Mukhwas' and 'Roasted Til & Ajwain,' both predominantly containing sesamum seeds. The applicant contends that these products should be classified under HSN code 12074090, based on the dominant presence of sesamum seeds and the principle of specific over general heading. The process involves cleaning, salting, roasting, and adding turmeric powder, which does not alter the essential character of the seeds.

The Authority for Advance Ruling (AAR) examined the composition and processes involved in making these products. It was noted that 'Mix Mukhwas' contains 60% sesamum seeds and 27% coriander seeds, while 'Roasted Til & Ajwain' contains 97% sesamum seeds. The AAR referred to the General Rules for Interpretation (GRI) of the Customs Tariff Act, 1975, which states that mixtures should be classified based on the material that gives them their essential character. Given the dominant presence of sesamum seeds, the AAR concluded that both products fall under HSN code 12074090.

Issue 2: Applicability of GST Rate

The applicant sought clarification on whether the products are covered by entry no. 70 of Schedule I of Notification No. 1/2017-Central Tax (Rate), which would subject them to a GST rate of 2.5% CGST and 2.5% SGST or 5% IGST. The AAR confirmed that since the products are classified under tariff item 12074090, they are indeed covered by entry no. 70 of Schedule I of the said notification, making them liable to the specified GST rates.

Ruling:

1. The products 'Mix Mukhwas' and 'Roasted Til & Ajwain' are classified under Tariff Item 12074090 of the Customs Tariff Act, 1975.
2. The products are covered by entry no. 70 of Schedule I of Notification No. 1/2017-Central Tax (Rate) and are taxed at the rate of 2.5% CGST and 2.5% SGST or 5% IGST.

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